How to measure the value of a digital idea

Author

Hogne Malum Gjersvik

December 10, 2014

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Ever since the 1950s Mad Men on 5th Avenue, concept creators has tried to argue why exactly their idea would be profitable. The advertising industry has often based its reasoning on hindsight reflections. This out of a desire for short-term gains and belief in their own gut feeling. If they found a dazzling new twist to help sell Lucky Strike – an emotional argument would suddenly appear. Fortunately the world evolves…

From Don Draper to Digital Customer Experience

In the last 10 years, new ideas are suddenly in demand in the global business world. Consumers demand better, quicker and simpler digital solutions – but how can businesses profit from this? They are often caught realizing that they no longer have the app, website or backend solution to make the end user feel valued. The new and more agile kids on the block are suddenly rushing past them.

Businesses know they need to be innovative but how can they know they are on to a winning idea?

Not so Lucky. Creating ideas for the businesses world has not always been based on creating a good user experience.

Secret formula to measuring digital ideas

I have developed an informal tool to validate digital ideas early. This will nip low valued projects in the bud. The B.U.T. Matrix is based on three parameters:

Brand experience (B)

User value (U)

Technical obstacles (T)

Always think B.U.T. If your concept has a strong Brand Experience, high User value and few Technical obstacles there is a good chance for a profitable solution.

The Guinea Pig – Crash Corp.

Let me show you a few examples on how you can validate your ideas. In this fictional scenario, Crash Corp. is a well know player in the Norwegian insurance industry. Their problem is that they don’t sell enough car insurance compared to their competitors.

Crash Corp. argue they can fix this problem in-house. They decide to increase their marketing budget on traditional banner ads for their excellent car insurance. This idea scores high on two parameters; It offers information relevant to their Brand values (B) and have no Technical obstacles (T).

The problem is the User value (U). User patterns shows banner campaigns close to never have a high return on investment (ROI). Users simply do not engage in traditional digital advertising. The value of this idea is therefor low.

Let’s get spicy

Crash Corp. do not give. They immediately pick up the phone and contact their trusted advertising agency, demanding “We need something spicy!”. The ad men are determined on creating something fun and engaging for the users. So they put a lot of money to work, making a car game app. The Crash Corp. logo is well-exposed trough out the app.

This idea scores high on User value (U) since a lot of them like a free car game app. But the idea plummets on Brand experience (B). It does not include any incentives to by car insurance. Add a few Technical obstacles (T) and the non-measurable Top-of-Mind effect does not justify the development cost. The idea is again of low value.

None of the three concepts hits the target in the B.U.T. Matrix

Big data FTW

For a third time Crash Corp. have a go at it. They hire a team of scientists and product designers. They produce an advanced tracking device that they ship to every car owner in Norway – free of charge. The device can track speed, the drivers aggressiveness and cross-reference this with the risk-value of the area the drivers are passing trough. The corresponding app is integrated with several national traffic databases. From this it can calculate the appropriate car insurance from Crash Corp. for each driver trough out Norway.

The solution scores high on Brand Experience (B) but low on User Value (U). It does talk directly about the Crash Corp products, but to suggest an appropriate car insurance is not enough incentive for the user to engage in the program. On top of this it has several Technical obstacles (T). Costly integrations and production of the device makes this a low valued idea.

Great user experience that increase the profit

Finally Crash Corp utilize the DARC framework with the phases: Discover, Analyse, Reflect and Create. The team agree that the top task for the solution should be to sell more car insurance (B). The Discover phase quickly finds that buying car insurance is of low-interest to the user (U). The bar for engaging them must therefor be lowered.

The sales process should be wrapped into something of actual user value. To keep the cost down the solution should have as few technical obstacles (T) as possible. From interviews of the target audience they discover that a lot of people need help in the situation when buying a car. The users feel they are getting a rotten deal at the used car dealership. They also find it hard to argue about the price since they have a knowledge gap compared to the used car salesman. The Experience Design team concludes that a provider that can solve this problem will gain the users trust and attention.

They decide to produce the app call ScanAcar. The app lets the user scan a cars licence plate with their mobile camera. The app is integrated with sales databases and can therefor provide the user with a valuation of the car. This will enable Crash Corp. to be the helpful friend everyone needs when buying a used car.

The effect is that the user now know what they should pay for the car. It also supplies facts about the car like production year, model, make, mileage, service history and any liable issues. It also adjusts the valuation according to the geographical position. In Norway cars generally are 3-5% less expensive in eastern part of the country than on the west coast. Crash Corp. have empowered their potential costumers.

Concept sketches for the Used-car-helper app

The user gets a great value added to their experience of buying cars. They can now avoid paying too much for their next used car. On top of this the app appeals to our general curiosity. Maybe you want to know what the neighbours new Mercedes cost? This helps Crash Corp. getting attention in an otherwise closed of market segment.

For each licence plate that are scanned an insurance offer from Crash Corp is presented. This is calculated from the user profile insurance details and can be adjusted at any time and comes with no obligations attached. Crash Corp. are now a supplier of relevant user value (U), while they deliver a Brand experience (B) with close to no Technical obstacles (T).

In conclusion the solution should provide a ROI within a few months. After 12 months the ROI have risen to around + $4.000.000. On top of this Crash Corp. can expect an accumulated income from the coming years with the only expense being the yearly SLA on $50.000.

The value of the idea is high. It meets all the B.U.T. Matrix critereas and is well within an economical risk zone. Based on this, the Capgemini DCX team advices Crash Corp. to start a more comprehensive prototyping and testing phase. The final goal being implementation within the next three months.

The MUM test

If you do find yourself coming up with a great digital idea, I’ll provide you with a simplified process of testing. Ask yourself the three B.U.T.s.